Status Update: April 30, 2017

Status Update for end of Month 39

I thought I’d start putting out regular status updates for where I am, and goals for where I am going forward. The idea would be to provide information to the reader, and to help motivate me as I move forward.

I understand that for some folks, they may not be able to relate (the numbers may seem too large or too small for their current situation) but I believe that everyone can benefit from more information. Take what I am doing with a grain of salt and with the other reading you are doing, and make your plans appropriately.

My Goals for 2017 (some financial, some not):

  1. Put in $33,000 in tax-advantaged accounts throughout the year
  2. Put in all bonuses, gifts, and our previous house payments into regular accounts (estimate of $26,000 year)
  3. Increase dividend income from our investments to $18,000/year (and reinvest them)
  4. Get Passive income up to 65% of living expenses
  5. Beat a 6% growth rate on our net worth
  6. Begin attending local real estate investment association meetings, to learn about and begin preparing for real estate investing in 2018
  7. Start a blog (i.e. this one)
  8. Fitness: Increase weight lifted by 10% over the year
  9. Average 3 hours of cardio each week
  10. Go on an international trip
  11. Visit one national park

The primary reason we can devote so much money to investing in our 401K/IRAs and other accounts is that we’ve managed to pay off our mortgage last year, and I got a significant raise. With my wife’s and my salary, and no debt, we are doing the typical thing folks in their 50’s do – pouring a ton of money into investments to try and prepare for retirement/financial independence.

We live fairly frugally (average under $4000 in expenses per month in one of the more expensive places in the US to live). While we have the funds to do a lot of stuff, we chose to keep our expenses low, so we can save and keep our stress level low.

At the end of April, here is where we are:

  • Savings/Checking/CDs: $141,601 (my wife likes to have a lot in cash; we argue about this sometimes)
  • Investments: $220,285
  • 401K/IRA’s: $468,883
  • Roth IRAs: $195,602
  • Total: $1,026,372

For the first time in our lives, we are over $1M in liquid net worth! With the 4% rule, we could take out $40,000/year for the rest of our lives. Just knowing this dramatically decreases the stress that we are feeling.  Based on the social security payments we could get (I know, if we get), we could go to $66,000/year right now, even if we only got 75% of our benefits.

Overall, I would have to say that I’m pleased where we are at this point. Based on savings plan and growth, my hope is to be over $1.1M by the end of the year, as we progress towards financial independence.

I’ll try to go over my investment strategy and allocation in a future post.

Thanks for reading, and let me know your thoughts.

A little context….

39 Months

 

Thought I would give folks a short life history, in order to give some context for my story and struggles.

I worked my butt off in High School, and managed to get accepted to West Point (the US Military Academy). By joining the military, I got my college paid for, and got a fairly good engineering degree out of it. At the end, I went straight into the combat arms (Tanks) and was deployed to Germany during the last few years of the Cold War. I actually got a tour 3 weeks after arriving on my battle position and where I probably was going to die when the Russian’s invaded.  Gotta love those crusty platoon sergeants!

I also got married to my lovely wife, Mrs. 39 months, right out of school (and we’ve been together for 31+ years).

After five years in, and a stint in Desert Storm where my tank unit fought the Republican Guard, I got out in 1991, right as the economy was going into recession. Took me about 6 months to finally find a position in warehousing in New Jersey (within 3 hours of my wife’s family) and that is where we ended up settling for the last 26+ years.

I’ve worked in warehousing since then, either in management (Supervisor, Manager, etc.) or as an engineer, designing storage and processes, etc. It’s a great industry to be in, and it’s big throughout the US and the world. I’d recommend it to anyone who wants to get started in an industry with potential growth. Let me know if you want further details.

For finances, I signed up for the 401K retirement plan at the first job I had out of the military (since I was only in 5 years, I didn’t get a military pension), but I only put in for the matching amount. After about 9 years, I hadn’t accumulated that much – and then the 2000 crash hit.

Suddenly I was 36 years old, and realized how little I had set aside for retirement. At my wife’s new job (she’d had it for 3 years) the company had been putting 10% of her salary away, and she had almost as much as I had accumulated over 9 years (with the crash taken into account). Needed to get started!

I bounced my 401K percentage up to 10% of my salary in 2001, and by 2003 I was maxing it out. I got a promotion the following year, and dumped all that money into both of our Roth IRAs. So by age 40, I finally was on track with maxing out our tax advantaged accounts. It sucks that I had lost all those years of accumulation, though!

I also started doing a lot of reading (Dave Ramsey, Millionaire Next Door, etc.) which helped to further motivate me.

Over the last 10+ years, we’ve managed to continue to fully fund my 401K and our Roth IRAs, pay down all our debt, and finally pay off the house in 2015 (Yeah!). So we’re debt free and heading for the finishing line in 39 months.

Now we have to start working on what our life will be like when we achieve financial freedom?

 

Mr. 39 Months

And so it begins….

Welcome to the 39 months Blog. I chose to create this blog as a way for me to track my countdown to financial independence. Along the way, I hope to share interesting stories, links, book reviews and opportunities for the readers to benefit from my quest.

 

With good planning, good decisions, and a little luck, I hope to be financially independent by July 2020 (my independence day!). Wish me luck and follow along.

 

Mr. 39 Months

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